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September 2017

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A host of potentially disruptive technologies are creating digital "always-on" supply chains that will provide better efficiency, visibility, and customer service across a variety of industries, while challenging companies to find the talent to manage them, according to a new study by American supply chain association MHI and professional services firm Deloitte that is now in its third year.

The 2016 MHI Annual Industry Report titled Accelerating Change: How Innovation is driving digital “always-on” supply chains provides new insights into trends and technologies that are having a dramatic impact on supply chains and the people who run them, Deloitte said in a press release.

The study found that lack of skilled talent remains the industry's biggest challenge. For the third year, supply chain leaders identified “hiring and retaining a skilled supply chain workforce” as the biggest challenge facing supply chain professionals, with 58 per cent of respondents citing this as an industry challenge. “Customer demand for faster response times” (cited by 56 per cent) and “customer demand for lower delivery costs” (cited by 56 per cent) also continued to rank as key challenges for the industry.

One of the key findings of the study is that eight technologies enable “always-on” supply chains. Eighty three per cent of survey respondents (up from 75 per cent last year) believe at least one of the eight technologies in the report could be a source of competitive advantage or disruption for supply chains in the next 10 years.

According to the study, barriers to innovation remain the same. Again this year, industry leaders identified “lack of a clear business case,” as the major barrier to investments in new technologies, with 43 per cent citing it (up from 36 per cent last year). This was followed closely by “lack of adequate talent to use technologies effectively” (cited by 38 per cent) and “cultural aversion to risk” (cited by 35 per cent of respondents).

Another key finding is that companies are investing heavily in new technologies. Despite these barriers, more manufacturing and supply chain companies are increasing investments in these technologies. New technology investments over $1 million have increased from last year's survey; 52 per cent of this year's respondents said they planned investments in excess of that amount (versus 49 per cent in the 2015 study). Three per cent of respondents said their companies would spend at least $100 million on new technologies over the next two years. (SH)